The legislative session doesn’t begin until April, but the state’s annual budget debate kicks off this week as Gov. Bobby Jindal unveils his multibillion-dollar spending proposals for next year.
The presentation of the executive budget will show Jindal’s cards on what he recommends to cut, what facilities he wants to privatize or close and just how much patchwork financing he suggests to piece it all together.
Jindal’s top budget adviser, Commissioner of Administration Kristy Nichols, will outline the plans Friday to lawmakers, and from there, the legislative negotiating begins over how to close a $1.3 billion budget gap in the 2013-14 fiscal year that starts July 1.
While haggling over how and where to cut has become commonplace over the last five years, this budget deliberation comes with a new complication. State lawmakers also will be debating the governor’s proposal to rewrite much of Louisiana’s tax code.
Jindal’s seeking to get rid of state income taxes in favor of higher sales tax rates, possibly higher tobacco taxes and a widening list of services to be taxed by the state. The governor wants the whole exercise to be “revenue neutral,” meaning the state wouldn’t lose money or gain money from the tax code rewrite.
But there will be a lot of moving parts — and a budget dependent on the numbers panning out like the estimates suggest, adding further wrinkles to an already complex set of budget negotiations.
This year’s budget stands at $25 billion.
Jindal’s financial analysts have estimated the state’s projected income next year is nearly $1.3 billion less than the costs to continue all existing programs and services and account for inflationary growth.
The shortfall is on par with previous years since Jindal’s been in office. But that’s probably little consolation to lawmakers looking at what they can cut in a poverty-ridden state where large numbers of people rely on government programs for assistance.
The most vulnerable areas to slashing are health care services for the poor, uninsured and disabled and public colleges. Both sectors have taken deep hits to funding in previous rounds of cuts, leaving few easy choices left for making budget reduction decisions.
At least some of the budget gap can be closed if lawmakers and the governor refuse to pay for inflationary increases, merit raises and education funding boosts that they haven’t covered in recent years. Those are estimated to be about $164 million.
Few details have leaked about where Jindal might consider the latest budget slashing, but he’s made it clear he won’t seek to tap into federal funding available to expand Louisiana’s Medicaid program to help cover health care costs.
Jindal said last week that he won’t reconsider his refusal to widen the government-run health insurance program to cover as many as 400,000 additional low-income residents who would be eligible, even though the federal government would pick up most of the tab.
The Republican governor said Medicaid is an outdated, inefficient program and states should instead be free to design health programs that suit their individual needs.
He’s sure to face opposition from Democrats and advocacy groups who’ll seek to add the dollars into the budget and lessen some health care slashing.
Legislative budget hearings will begin shortly after the governor unveils his multi-billion dollar proposal. Wrangling over the plans likely will continue until the final days — or hours — of the legislative session, which must end June 6.
MAY 21 Gambit columnist Clancy DuBos writes about the Mother's Day shooting, and how the stages of shock and blame and healing mirror those traveled by the same city following Hurricane Katrina. The city will recover, just as it did following the storm, by reaching out to help the people injured most seriously by the event, DuBos writes. It's how we heal, he says.
MAY 21 Here's a post on the Advocate (but buried on a subpage, not on the front) that reports something Louisiana Voice reported some time ago: a top DOE official lives in Los Angeles and "commutes" to Baton Rouge. The positioning of the story caused a stir on Facebook Monday, with several posters asking if the Advocate was covering someone's hiney. Sentell's stories on DOE are notoriously soft, and this one is no different: don't expect any hard questions in here.
MAY 21 Here's another post from blogger Tom Aswell about the "course choice" program. He's already reported on kids being signed up without their consent or knowledge, and has more here: For example, he tells of a six-year-old who was signed up for high school Latin. He also digs a little deeper into the sister companies of the main one operating in Louisiana; all of them seem to have complaints against them. Stinky.
MAY 21 Given the 80 percent cut in higher ed funding since he's been in office, it's clear Gov. Jindal would rather give tax cuts to out of state companies than have a functioning system, blogger Dayne Sherman argues in this post. The cuts have been such a disaster, Sherman says, that it will take 30 years to fix what's been broken. He says he believes the aim is to shut down most of the schools before Jindal leaves in 2016.
MAY 21 Blogger CB Forgotston says there are too many elections in Louisiana, and they're costing us too much money. The proof is in the pudding: turnout for most of these nonsensical pollings gets worse and worse, CB opines, even as millions of dollars that could be spent on health care or higher ed go down the tubes. The legislature must take action to stem the tide of pointless elections, he says.
MAY 21 Here's an interesting investigative piece by WVUE on the retirement benefits of some Jefferson Parish public employees. According to the story, the taxpayers are paying 100 percent of the retirement contributions of employees who started work prior to a certain date in April 1986 -- and have done for more than 30 years. It costs the parish millions annually, and might not be legal, the story reports.
MAY 21 This post on Bayou Buzz provides insight from Louisiana's intrepid pollster, Bernie Pinsonat, on the winners and losers from this year's legislative session. But to hear Bernie tell it, there's almost nuttin but losers: Jindal, the Republican party, the Fiscal Hawks all get big goose eggs in his win column.
MAY 20 This post on The Lens takes a look at a huge (either $500K or $250K) bill that one NOLA charter now has for school lunches. The RSD says the charter group didn't fill out the proper paperwork for federal reimbursement, but the story details how the RSD didn't ensure the people running the charter had the proper training, despite requests from hapless charter employees trying to fill out forms. Either way, somebody's asleep at the wheel.
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Total revenue exempted under these 191 STE's total roughly 2.50 billion dollars(pg 13, LA Dept of Rev, Economic Development Report, 2011). Assuming for assumption sake, that all 191 STE's currently in effect were repealed(and Jindal has already “promised” such want happen) the resulting $2.50 billion of generated revenue would be $150 million dollars short of the $2.651 billion it is intended to replace. In other words, even if all 191 sales tax exemptions were repealed, revenue generated would be $150 million less than income tax revenue generated in 2011. Such defies Jindal's "revenue neutral" goal.
However, Jindal, through Tim Barfield, Sec. Of Revenue, has “promised”, indeed, has insisted, that some current STE's will not be repealed and are “off the table”-don't you just love those political euphemisms). Specifically, four STE's will remain in effect, exempted from repeal. STE's on food for home consumption($334 million), residential utilities($146 million), prescription drugs($239 million), and fuel($371 million), amounting to $1.090 billion in STE's “taken off the table”, therefore, not available to replace income tax revenues. With these exemptions “off the table”, revenue generated via STE repeals decreases by $1.24 billion dollars, 50%.
There are two more STE's, state and local governmental purchasers, $203 million dollars & non-residential electrical consumption, $257 million dollars-which Jindal and Barfield have remained silent on. However, I include these two for the following reasons: I can't see the state or local governments paying sales taxes, such would be a revenue redundancy(and) I can't envision a scenario where Jindal would approve increasing sales taxes on businesses. Including these two, along with the previous four STE's “off the table”, increases the total amount of STE's unavailable for replacement of income tax revenue to $1.70 billion dollars(68%). Revenue generated by repealing all remaining STE's, all 185, would generate less than $800 million dollars leaving a revenue “replacement shortfall” of $1.851 billion dollars. In other words, replacing revenue generated by state income tax with revenue generated via sales tax repeal is political “fodder”. The proposal is a political enticement(a political carrot) by Jindal aimed at distracting people from his ultimate revenue goal—Jindal's dedication to a revenue generating model requiring parish/local governments generate the bulk of revenue via higher taxes on property and services.